Jared Savage

Jared Savage is the New Zealand Herald's investigations editor.

Phoenix Forex man in bankruptcy breach

Mark Brewer in a 2006 file picture. Photo / Doug Sherring
Mark Brewer in a 2006 file picture. Photo / Doug Sherring

An Auckland businessman who admitted running a business while bankrupt also has a senior role in a foreign exchange trading scheme the Financial Markets Authority has warned the public about.

Mark Raymond Brewer, who had a brief time in the national spotlight when his brother-in-law was an Iraqi hostage, has pleaded guilty to one charge of breaching the Insolvency Act after an investigation by the Ministry of Economic Development.

The 39-year-old was bankrupted for a second time in March 2010 for a debt of $114,000 and one of the Official Assignee bankruptcy conditions is to not be involved in the direct management of a company.

He admitted breaching those conditions by taking part in the control or management of a computer software company, Intervest Global (NZ), which sold horse race betting software.

The company was placed in liquidation in September 2011 and Brewer is due to be sentenced in the Auckland District Court in October. His second bankruptcy was annulled in June.

Brewer became the public face of a campaign to free Harmeet Sooden, the brother of his wife Harpreet, who was held hostage by Iraqi forces for four months before his release in early 2006.

The Herald can also reveal that Brewer is a self-described "sales legend" for Phoenix Forex Ltd, a foreign exchange trading system which the FMA issued a public warning about last week.

Phoenix Forex - of which Kendall Twigden is the sole director - has advertised returns of between 50 to 65 per cent by using an algorithmic trading software called Oak FX.

"The FMA believes that Phoenix Forex's claims about the level of returns made by its trading system are untrue, and that Phoenix Forex is misrepresenting the profitability of, and risks associated with, its trading system," according to a statement.

"In FMA's experience, it is highly unlikely that this kind of investment can deliver such high returns. Phoenix Forex has not been able to provide any evidence to support its claims of having achieved these returns. Further, investments of this nature carry a high risk of loss of some or all of an investor's capital and losses can exceed the amount of the original investment.

"Investments promising unusually high returns are often not legitimate offers. FMA urges caution by anyone considering dealing with Phoenix Forex."

The FMA said Phoenix Forex was advertising widely and making unsolicited cold-calls to potential investors, who were required to pay a substantial up-front fee of up to $25,700 to subscribe to the system.

The company was also not registered as a financial service provider and had not been authorised or licensed by the FMA.

Twigden, who was travelling overseas with Brewer, did not accept the FMA allegations and said she had answered any questions they had.

"We had anticipated a response to our last communication but have only received [the public warning] so far. We invited them to attend a meeting with our lawyers, a licensed broker and the developer of the software recently but they failed to respond or attend.

"I stand by the product we have represented and where issues have arisen have worked hard to resolve them for people. Far more it seems than most of the 'main stream' financial markets have done in the last five years."

The 23-year-old said a full statement will be issued by the company in response to the FMA.

Asked whether people could trust Brewer, Twigden said he was not "currently bankrupt" and had worked hard to have his bankruptcy annulled.

"I also understand that he maintained his innocence regarding managing a company over two years ago while bankrupt, however recently plead guilty in order to move on with his life and be with his young children.

"For the purpose of clarity. Brewer sold the product and offered assistance as directed."

Brewer was previously bankrupted in 1997 over a $32,000 debt owed to the American Express credit card company and has been involved in other failed businesses.

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